Tag Archives: health care

Having been in the health care field for 40 years, Jim Dickson is well suited for his position as CEO of Bisbee’s Copper Queen Community Hospital. Dickson has worked in hospitals of all sizes, from large ones with 440 beds to smaller hospitals, such as Copper Queen, with just 15 beds.

Dickson says he prefers rural, smaller hospitals because of the “strong intrinsic reward to working in rural areas.”

Copper Queen’s main challenge is serving a small number of people scattered over a large area, Dickson says. In his 12 years as CEO of Copper Queen, Dickson has put in place several programs to better serve Bisbee’s rural population.

“We’re bringing care where it was not there,” he says. “So, we’re actually really helping people.”

The hospital uses tele-medicine, which allows patients to see specialists across the state through video conferencing. Dickson’s strong commitment to tele-medicine has brought about tele-stroke, -dermatology, -cardiology and -trauma units. Copper Queen collaborates with Mayo Clinic Scottsdale, University Medical Center in Tucson, the University of Arizona’s tele-medicine program and the Carondelet Health System for its tele-medicine consultations.

He says tele-medicine is the way to solve the problem of physician shortages in various parts of the state, which puts rural communities at a disadvantage.

Dickson says he enjoys launching and employing new technologies and hopes Copper Queen will be the first virtual hospital in the United States. Becoming a virtual hospital will “eliminate the disparities of care between rural and city” hospitals, adds Dickson, who also chairs the Arizona Hospital and Healthcare Association’s (AzHHA) small hospital committee.

AzHHA, Dickson says, has helped Copper Queen affect legislation at the state level. Currently, Dickson, Copper Queen and AzHHA are lobbying the state Legislature to pass a law that will ensure Arizona’s health insurance companies cover tele-medicine. With AzHHA’s backing and advocacy, he says this legislation will guarantee that people in rural areas receive better health care.

Dickson says he is pushing “to ensure that all the people in the communities we serve receive the care they deserve as American citizens.”

Another way Copper Queen serves its patients is by operating the state’s three largest rural health care clinics. Through these clinics and tele-medicine, Copper Queen not only has begun to serve its patients better, but also save money. The hospital has grown by 30 percent each of the past three years.

During his time at Copper Queen, Dickson has used his experience to bring quality health care to the people of Bisbee and its surrounding communities.

“They needed it,” he says. “In Bisbee, you can really make a difference.”

Although there are 2.6 million registered nurses in the United States, by 2020 America will enter a nursing shortfall of more than 1 million nurses. Growing population and cuts to nursing schools are two main reasons for the shortfall.

However, this infographic from VeterinaryTechnician.com offers solutions to the nursing shortage, along with statistics about the nursing occupation.

The nation’s unemployment rate was unchanged at 9.6 percent after the economy lost 54,000 jobs in August.

The U.S. Bureau of Labor Statistics (BLS) reported today that government employment fell as a result of shedding 114,000 temporary workers hired for the Census. Private-sector payroll employment rose by 67,000.

“The August jobs report, albeit tepid, does show the economy is holding steady, despite speculation to the contrary,” says Frank Armendariz, Arizona regional director at Manpower. “This is consistent with what I’m seeing in the market, as well as what the quarterly Manpower Employment Outlook Survey (MEOS) has been reporting for the past three quarters. Our quarterly MEOS survey measures employers’ intentions to increase or decrease the number of employees in their work force during the next quarter, and we’ve seen consistent results in our Phoenix-area survey this year.”

According to the BLS, the number of jobless Americans stands at 14.9 million. The number of long-term unemployed (those who have been out of work 27 weeks or more) declined last month by 323,000 to 6.2 million. In August, 42 percent of the nation’s unemployed had not worked for 27 weeks or more.

Government employment fell by 121,000, largely due to the loss of Census 2010 workers. Total private employment continued a rising trend. The BLS reports that since its most recent low in December 2009, private-sector employment has risen by 763,000.

“The fact that we’ve seen eight straight months of private-sector job growth is very encouraging and is consistent with what I’m seeing — employers are continuing to hire each quarter, but in limited quantities, with a majority of firms holding steady with their current labor force,” Armendariz says. “This is an improvement from last year when we were seeing mass layoffs and very little hiring.”

Employment gains were seen in health care, mining and construction. The manufacturing sector lost jobs, while employment in retail trade was essentially unchanged.

“The recession brought about huge changes in the labor market in a very short period of time,” Armendariz says. “Now we’re seeing new jobs come back very slowly. At the current pace, it will take years for us to get back to pre-recession employment levels. As a result, the limited labor market growth we’re experiencing feels almost imperceptible in comparison to the free fall we took in the wrong direction last year.”

Anthony Marinello
CEO, Mountain Vista Medical Center/IASIS Healthcare

What will be the impact of Arizona’s budget cuts on hospitals in particular and the health care industry in general?

All hospitals are going to feel the impact. There are several areas: education, economy, jobs, general medical education; and it’s just going to take a big effect on us. It’s really going to change the way we do things. But we are still going to be here to take care of our patients and give them high quality of care. The cuts this year, that just occurred in March, are going to cost several millions of dollars, which will drastically impact patient care and patient’s ability to come there. But, like we say, we’ll be open and still take care of our patients.

What will be the effect of the recently signed federal health care reform?

I think everybody agrees that we need health care reform. There’s no doubt about it. The key with this will be to continue to build and strengthen relationships with our physicians, who ultimately have the relationships with the patients. It’s so new right now, that I think everybody is trying to grab it and grasp onto what the effects are going to be. You have physicians that are nervous; you have hospitals trying to figure out what (it will mean to them). It’s going to be interesting. The key part we all really agree on is the electronic medical records, which is good for the transparency and being able to avoid duplications of testing and things like that. We are currently, at Mountain Vista, way ahead of the curve on our electronic medical records, and physicians like that. It’s a very good tool to be able to see the records from the hospital or even your office, because it’s Internet based. So it’s been very, very good for us.

We’ve heard much about the nursing shortage in Arizona. Has there been any improvement in that situation?

There will always be a need for nursing. Per se, we haven’t really seen much of a shortage here. We’ve been able to attract a lot of the new graduates coming out. IASIS as a company, since 2005, has been engaged with schools and several universities. We’ve seen about 350 students coming through, which we work with them and eventually employ them, so we have been very, very fortunate in that part. We always have people looking to become a nurse. You have certified nursing assistants that want to go to the next level, so that ability is there where we provide assistance for them.

What are the areas where Arizona’s health care industry is really excelling?

In the short time I’ve been in Arizona, where I’ve seen (the health care industry is excelling in) is education. (Arizona State University) has a health school, (University of Arizona), (NAU), A.T. Still (University), Midwestern University. And actually our facility is partnered up with Midwestern University for the medical student program for physicians, and we’re looking at what the future can be to keep education and future physicians in this area. So we are really proud to be partners with them and just continuing to grow. We just engaged in this last July, so it’s very new to us.

In these changing times, what does a C-level executive need to succeed in the health care industry?

You have to build strong relationships. You have to be a good communicator. You have to be honest. You have to be up front. If something can’t be done, you’ve got to tell it. You can’t just leave things alone. You have to be visible, high visibility. You have to be able to talk to all staff, from your environmental services person to the president of your company to every physician. It’s just very, very important to think outside the box, to listen to what people have to say, because there are a lot of people with good ideas out there. That’s something I’ve prided myself on and the team I work with and our C-level here that our doors are open, we’re always there, we want to hear, we want to listen. The relationship building has been a strength for us here.

Vital Stats: Anthony Marinello

Named CEO of Mountain Vista Medical Center in Mesa in 2008

Served as CEO of IASIS’ North Vista Hospital in North Las Vegas from 2005 to 2008

Served as hospital administrator for Desert Springs Hospital Medical Center in Las Vegas

Many population health management programs face closer scrutiny when a company is faced with difficult budget decisions during a tough economy. But health and health care costs are a strategic priority for every business whether they acknowledge it or not — and most readily do.

In times of economic downturn, companies might want to consider increasing their spending on health and wellness initiatives. Why? Because in an economic downturn, maximizing productivity and reducing costs are more important than ever.

The true cost of poor health includes indirect costs, as well as the more obvious direct cost of medical claims. The more bad health habits or risks employees have, the lower their productivity; and health risks directly equate to higher health care costs, both direct and indirect. A number of medical conditions, if left unmanaged or poorly managed, become catastrophic, ending in hospitalization and reduced functioning, thereby reducing productivity. Lastly, health and wellness programming is a relatively low cost and important item. It decreases disease, but also influences whether employees like their jobs and feel cared about by an employer, which in turn affects productivity and absenteeism.

There are some key preventive measures a company can take that help keep people from slipping into a high risk, high-cost category. First, know what the most common or costly conditions are in your population and offer programs targeted to help your people manage these conditions. Encourage the local medical community to be an active partner with innovative management tools and strategies. Also increase the employees’ stake in the equation, but not regressively. Again, making disease management easy and affordable will likely save money. Lastly, look for quality in the medical care your employees get. Help your employees find quality care for catastrophic, high-cost conditions, and make helpful, quality information easy to access. There are now a number of good Web-based sources of quality medical information, such as the Centers for Disease Control and Prevention (CDC), National Library of Medicine, and mayoclinic.com.

When prioritizing program elements during tough economic times, companies can minimize downstream health costs and productivity impacts if they focus on initiatives that prevent the onset of high-cost, productivity-lowering diseases such as diabetes. In most health promotion and disease prevention programs, we know there is a three-to-one return on your investment, and you get the pay back in one to two years.

For mild conditions such as high blood pressure, high cholesterol, and Type 2 diabetes, company policies should make it easy to treat these conditions, and encourage medication and behavioral approaches. Make common medicines cheap to the end user, and encourage regular use of prescribed medications. Back it up with multimodal messages throughout the year. Make talking to a human easy when people have questions about their condition or medications with telephonic coaches, disease management professionals, group classes, or an onsite nurse.

Online personal health managers are a new consumer tool that will likely play a key role in helping people take their medications and manage their conditions. Using an online personal health manager also forms a bridge to doctors, and can give personalized day-to-day support and guidance to people via the Internet.

Keep healthy people healthy to prevent downward risk migration that can make health costs jump, and engage as many of your employees as possible in something positive. The first step is to get their attention. A health assessment tool provides a teachable moment and a jumping off point for engaging people in the wellness options you may offer.

Tracking data can often represent a significant time and dollar investment that may be difficult to keep up with during lean budget times. But the old adage of you can’t manage what you don’t measure is true in population health management. Maintaining a database of health status and trends is critical for making informed decisions on what interventions will have the most impact for your particular population. It also helps you justify the expenditure by showing whether you’re making a difference over time.

Use a health assessment as your baseline data set. It allows immediate feedback to the individual and gives group data for needs assessment and program development. It allows tracking of change over time, an early warning system and modeling of pay back from various program options. And it’s low cost, especially the online versions.

When faced with difficult budget decisions, if you are contemplating cuts to your health and wellness programming, stop and think about the downstream implications. Preserving these programs not only will help you keep your bottom line healthy, but also may improve your employees’ health, productivity and morale.

Many in the Valley still don’t realize that heart disease is the No. 1 killer of women. But with long-standing health care educator Grand Canyon University (GCU) putting its muscle behind the annual Go Red For Women campaign, you can bet the issue will become top of mind.

“With our penetration in the local health care market and our ability to advocate through our 30,000 students, faculty and staff, we can take the community education component of the Go Red For Women effort to a very grassroots, but also broad-based level,” says Fran Roberts, RN, PhD., vice president of strategic business alliances of the College of Nursing & Health Sciences at Grand Canyon University.

Roberts is chair of the annual Go Red For Women campaign and luncheon, and GCU has agreed to a three-year sponsorship of the program. The power of GCU’s reach through its campus students and faculty, as well as its online student population, will take the outreach well beyond the Valley’s borders.

“The multiplier effects of our partnership should really help drive home the message throughout our community that heart disease continues to be the No. 1 health threat to women,” says Roberts, who will lead a community speakers bureau of advocates within GCU to promote the heart-healthy message.

GCU already has plans underway to mark the importance of the cause, making an effort to integrate components of the program into every aspect of the university, from food choices in the student union to “going red” at sporting events, and bringing in Go Red messages to its community events that reach tens of thousands of residents each year.

“Red represents much more than a color on this campus,” Roberts says.

The university will wear red with pride as the Grand Canyon team participates in the Start! Phoenix Heart Walk on Feb. 27, and will celebrate National Heart Month with a variety of activities.

The entire campus plans to be immersed in red — including faculty, staff, students and wrapped buildings — on a designated date in February when the university hosts a Wear Red fashion show on the campus promenade and an important basketball game takes place.

In addition, GCU will host a Hearts in the Arts competition in the spring, encouraging high school students to celebrate heart-healthy living in a competition to benefit the Heart Association.

The sixth annual Go Red For Women luncheon takes place on May 14, at the Sheraton Phoenix Downtown Hotel.

Helping companies

Reducing just one health risk increases productivity and reduces absenteeism.

Every dollar invested in worksite health promotion programs averages between a $1 and $3.50 savings in health care and absenteeism costs.

What is Start!

Start! is the American Heart Association’s groundbreaking national campaign that calls on all American companies and their employers to create a culture of physical activity and health in order to live longer, heart-healthy lives through walking. Promoting physical activity through workplace walking programs can help employees reduce their risk for heart disease and stroke and lead to longer, stronger, healthier lives.

Through Start!, the American Heart Association is challenging corporate America to create a culture of physical activity that can help companies address rising health care costs.

It’s also a call to action that evokes active, year-round participation in walking and reducing the risk of heart disease and stroke by supporting the American Heart Association. By participating in the Start! Walking Program you are setting an example for your employees. If leaders show they have made health a priority, employees will do the same, resulting in an increase in productivity and a decline in health care costs.

In addition, Start! is a long-term commitment to fight the major causes of heart disease and stroke in American adults through a comprehensive walking and nutrition program. Companies that sign up for the Start! Walking Program receive a guide that includes a step-by-step plan to kick off a business’ Walking Program, as well as tips on how to maximize employee participation. By following the steps presented, you can encourage and motivate your employees to get involved, stay involved and improve their health. To learn more visit www.americanheart.org or call (602) 414-5353.

Why your company should get involved

Investing in the health of employees is one of the best decisions a company can make. At least 25 percent of the health care costs incurred by working adults are attributed to modifiable health risks such as poor diet and lack of exercise.

With more pressure today than ever before, Corporate America is struggling to be profitable while health care costs continue to rise and attack their most important resource — employees. Most executives know that creating a wellness environment is the only way to have healthier employees and ultimately, lower health care costs.

After more than 23 years as president and CEO of the Arizona Hospital and Healthcare Association (AzHHA), John Rivers announced he will be stepping down in January of next year. Arizona Business Magazine asked Rivers about his tenure at AzHHA and the challenges facing the health care system.

How has the Valley and state’s health care industry changed in the 23 years you’ve helmed AzHHA?
Health care in Arizona barely resembles what it looked like 25 years ago when I first arrived. In fact, I think it is better in every respect. Hospitals in particular are more sharply focused on cost-containment strategies, physician integration, patient safety and, of course, providing cutting-edge medical care to their patients. Hospitals have also made giant strides in better management of their human resources, particularly nurses, who are the heart and soul of good hospital care.

How has AzHHA’s mission changed over the years to adapt to the Valley and state’s evolving health care industry?
Our primary mission remains political advocacy, although the complexity and difficulty of doing that well has increased exponentially. The tremendous diversity among types of hospitals, and the even greater diversity of personalities among our CEOs, requires a great deal of adaptability on the part of the association CEO.

What are some of the biggest challenges you see facing the health care industry today?
All of us in health care are facing tremendous uncertainty about our future. Congress is on the verge of re-writing the book on government’s role in health care, and at the state level we face the greatest budget crisis in our history. With the federal and state government already purchasing about 70 percent of the hospital care in Arizona, our world will no doubt change dramatically. At a minimum, our future will require us to be more accountable, more transparent and more integrated. Also, we’ll see a seismic shift away from the revenue enhancement model to a cost-control model.

What would you say are some of AzHHA’s greatest successes over the past 20 years?
I think we have been very successful in our political advocacy and our record more than speaks for itself in that regard. More than that, I tend to define our success in terms of achieving our mission with competence and integrity — and keeping our focus on what is best for health care in Arizona and what is best for the patients served by our institutions.

Do you plan to stay involved in health care, and how?
I will definitely stay involved in a number of charitable and community service activities in which I currently participate, but I have no plans to remain involved in health care except as a citizen who cares profoundly about all that we do. I’ve spent the past 40 years of my life in health care, 25 of them in Arizona, and it’s time for me to move on and enjoy life in ways that I have not had time to do up until now. There’s more to life than driving to the office each morning and I intend to live my other dreams while I am still in good health and able to do so.

The second wave of the influenza pandemic should be upon us in earnest soon. So far, the virus remains similar in severity to regular flu (although a disproportionate share of those seriously ill are children and young adults). However, it continues to mutate and there remain unknowns.

The one near certainty we have learned from history is that many more people than usual will contract this Novel H1N1, or Swine Flu, virus. We may be faced with at least one-quarter of us falling ill within the next few months.

The decisions you make as a business leader will impact your employees, your organization and your bottom line. I recognize that the actions of the Maricopa County Department of Public Health can affect your bottom line, as well. I can assure you that with every decision I make, whether it’s closing a school to disseminating our first few doses of vaccine, I am constantly balancing the health of our community with the economic repercussions of our actions.

We have been working for years to engage our business community in developing a continuity of operations plan for events such as this pandemic. If you have created such a plan, it’s time to take it out, brush it off and make any updates necessary. If you don’t have a plan, that’s OK. But it’s time to start thinking now about how this virus may affect your business.

Your role in this pandemic is to do your part in slowing the spread of this flu in your workplace, thus slowing its effect on your business. Consider these planning tips:

Policies for staying home when ill and for sending ill employees home
This really will make a difference in slowing the spread of disease. I realize that such absenteeism may be difficult to accommodate, especially during these tough economic times. But you should have less absenteeism in the long run if you keep sick people out of the workplace and away from your other employees.

Policies for parents
In addition, please accommodate your employees who are parents and must leave work to pick up their sick child from school, or who must stay home with a child who is ill or whose school has been closed. Our ability to slow the spread of this flu in the community hinges upon limiting spread in the schools.

Promoting good hygiene
We should all get in the habit, right now, of practicing good hygiene to protect ourselves and others by washing our hands, keeping our hands away from our faces, and covering our coughs and sneezes.

Promoting employee vaccinations
The vaccine for the Novel H1N1 should start arriving by late November. This vaccine has been developed in the same manner as our seasonal flu vaccine, and early indicators show it is a good match to protect us from this new strain of the flu.

Because this vaccine is rolling out in small amounts at a time, we are providing it first to those who are having the most severe complications from the Novel H1N1 flu, and those who spread it most to others: pregnant women, health care workers, parents and family members of children under 6 months, children aged 6 months to 24 years and those aged 24 to 65 with chronic health conditions. Employees who fall into these high-risk categories should get vaccinated as soon as it becomes available.

As we enter November, we should also be receiving additional seasonal vaccines. Encourage employees to get themselves and their families vaccinated. The more people who are immunized, the better chance we have of keeping the virus from jumping from person-to-person-to-person. There also is good data to show that bringing a vaccine provider into the workplace can be very cost effective for many businesses. If your employees do not have access to the vaccine through their health care provider, log onto www.fluaz.org for vaccine locations.

This event is changing rapidly. You can stay informed, as well as access tools needed to educate your employees, at www.StoptheSpreadAZ.org (click on Maricopa County). Please do your part in stopping the spread.

After a decade of significant growth, the Valley’s health care industry has become an economic driver for the state. During this severe economic downturn, however, the health care industry busted the myth of being recession proof. But that doesn’t mean it’s recession battered.

Health care organizations have weathered the economic turmoil better than most industries in Arizona. For example, the Arizona Department of Commerce reports that in July, year-over-year job losses in health services stood at 1 percent, or 3,200 jobs. That was the slowest rate of loss of any major industry group in the state.

Nonetheless, hospitals and other health care organizations are feeling the effects of the recession and are working diligently to match revenue with expenses.

“Overall, the financial picture for Arizona’s hospitals is somewhat improved from the third and fourth quarters of 2008, despite decreases in volume,” according to Jim Haynes, vice president, finance, and Chief Financial Officer for the Arizona Hospital and Healthcare Association. “That improvement is not due to better payment from payers, like the federal and state governments. It is directly linked to the steps hospitals took in late 2008 to contain and cut costs in response to the economic environment.”

Case in point: Linda Hunt, service area president for Catholic Healthcare West Arizona, which includes Chandler Regional Medical Center, Mercy Gilbert Medical Center and St. Joseph’s Hospital and Medical Center, says many local hospitals are facing state and federal funding cuts, as well as dealing with growing numbers of people who are uninsured. In addition, admissions in some specialty areas are down because people are waiting longer to seek health care and are canceling or putting elective surgeries on hold.

Catholic Healthcare West also has seen a decrease in donations. Many donors are either curtailing their commitments or making smaller donations.

“The health care industry is strained just like any business,” says Hunt, who continues to serve as president of St. Joseph’s. “Financially we’re facing cuts, plus we don’t know what health care reform is going to bring, so we don’t know what our future is going to be. That’s stressful for the industry across the board.”

To deal with the economic slowdown, Catholic Healthcare West started making cutbacks and implementing cost-saving measures last September. St. Joseph’s reduced travel and catering expenses by 35 percent for a cost savings of $780,000 in fiscal year 2009. The hospital also became more diligent about the use of linens and replaced disposable pillows with sanitary reusable pillows, saving $90,000 in FY 2009. The hospital’s management team also took a 2 percent or more pay cut to help save jobs.

“We met with all the employees and they came up with great money-saving ideas,” Hunt says. “When all was said and done, employee suggestions helped save us more than $3 million a year. We are back on budget and that was our goal.”

Phoenix Children’s Hospital also has been prudent in pushing expenditures back. It cut administrative and advertising costs and stopped using traveling nurses, a move that saved the hospital $7.5 million a year. Bob Meyer, president and CEO of Phoenix Children’s Hospital, says they also have taken a hard look at attrition over the past eight months and have backfilled only 30 of 100 open positions. Phoenix Children’s $588 million expansion, which kicked off in 2008, has been scaled back, as well. Plans now call for shelling 1.5 floors of the 11-story tower for future growth.

“Given the economy and Medicaid reimbursement uncertainty (about 50 percent of kids in Arizona are on Medicaid), we have to be more conservative and push expenditures back,” Meyer says. “But even shelling floors will increase the number of beds we have from 345 to 486 when we open, which is what we need. Our patient volume is growing 15 percent a year and every bed in service is occupied almost 100 percent of the time.”

The tower’s first four floors will be completed in late 2010. Occupying the floors will be a cafeteria, kitchen, clinics, an imaging center and a retail pharmacy. The remaining floors of the tower are dedicated to the hospital’s Center’s of Excellence, clinical programs and private patient rooms. They will be finished in late 2011.

To keep Scottsdale Healthcare moving forward, President and CEO Tom Sadvary cut expenses and re-focused capital spending on medical technology, information systems and refurbishing projects. He also streamlined the management and executive team structure, creating fewer layers and a more agile organization. Green measures also were implemented at Scottsdale Healthcare’s three hospital campuses. Examples of the efforts include:

Replacing 40 pickup trucks with electric vehicles at all three hospital campuses.

Sadvary contends that Arizona’s health care industry remains healthy and strong despite reimbursement challenges, nursing and physician shortages, and the abrupt changes the health care industry has faced over the past two years.

“I’ve been in Arizona 23 years and I’m proud of the health care industry here and what we’ve done to grow talent, capacity and to improve the size and sophistication of services for patients,” he says. “Arizona knows how to step up and we will continue to do that despite challenges along the way. The health care industry is sensitive to the budgetary issues the state is facing. And while we are all trying to be efficient and frugal with resources, our costs are going up. We’re doing the best we can to manage and provide great care with no more dollars coming in from the state.”

Banner Health President and CEO Peter Fine is a firm believer that major changes are coming down the pike in reimbursement formulas for Medicaid and Medicare that will cause more pressure on local hospitals. If that happens, he says, hospitals will have to make very difficult choices on what services to provide and what services they can no longer afford to provide.

“With rising costs and so many cutbacks in health-care spending, it’s amazing that hospitals and physicians can prosper today, as well as forecast for the future,” Fine says. “Companies have to be flexible enough to embrace change and move with what’s happening environmentally. Banner demonstrates flexibility by making investments grow and starting new programs. We also have great leaders at all levels and we invest in talent management, so our people are developed and prepared to lead us through tumultuous times.”

In spite of the economy, Phoenix-based Banner Health is continuing to make investments and grow in the communities it serves. Banner recently invested $289 million to build a new, seven-floor, 200-bed patient tower and emergency room at Banner Thunderbird Medical Center in Glendale. It also invested $12 million to rebuild the old Banner hospital in Mesa and create the Banner Simulation Medical Center, the largest simulation training center in the nation. The 55,000-square-foot center opened in August and has 20 full-time employees who will train 1,200 to 1,500 medical professionals (nurses, physicians, surgeons, respiratory therapists) annually. The simulation medical center occupies the bottom nine stories of the building, with the top eight housing Banner offices.

Students at the simulation center train on high-fidelity, electronic mannequins that look like human patients and come in a variety of shapes and sizes. The mannequins have a heartbeat and they talk, burp, sweat and bleed. They also have medical maladies such as strokes and heart attacks, as well as give birth and “die.”

“Banner Simulation Medical Center is basically a hospital where we can train nurses to work and interact with 20 patients on a floor at a time,” says Dr. Marshall “Mark” Smith, senior director for simulation and innovation at Banner Health. “Nurses that graduate from medical school can manage one patient, not multiples. We now have the ability to train new nursing graduates to care for multiple patients without putting them at risk or overwhelming them. ”

Children in the Valley have access to some of the most comprehensive cancer care in the region, thanks to the two hospitals that are solely dedicated to pediatric patients — Phoenix Children’s Hospital and the soon-to-be-opened Cardon Children’s Medical Center.

Phoenix Children’s Hospital houses the state’s largest pediatric cancer program and is a long-standing member of Children’s Oncology Group research consortium. PCH also boasts the Valley’s only pediatric blood-and-marrow transplant (BMT) program, thanks to its partnership with the Mayo Clinic. Phoenix Children’s has state-of-the-art rooms to meet the special needs of BMT patients who have suppressed immune systems.

“We also have a long-term survivor follow-up program, which is really important in pediatrics because you’re not just taking care of a disease, you’re taking care of a child, and those children can be 18 months when they’re first being treated, they could be teenagers when they’re first being treated, either because of the disease they have or the treatment or the surgery or the radiation; its not like adults where a vast majority of patients don’t survive,” says Dr. Michael Etzl Jr., director of the Center for Cancer and Blood Disorders and co-director of the neuro-oncology program at Phoenix Children’s Hospital. “At least 70 percent of all pediatric oncology patients are long-term survivors. We actually have three of the nurses that are working for us that are childhood survivors of cancer.”

PCH also works to care not just for young cancer patients’ bodies, but also for their spirits. As part of that effort, the hospital offers its Rainbow Kids’ monthly events. Along with providing some needed fun, the events give families who have a child with cancer the opportunity to meet other families facing the same challenge.

The fight against pediatric cancer in the Valley gets a boost next month with the opening of Cardon Children’s Medical Center in Mesa.

Cardon Children’s Medical Center is the new name and home for Banner Children’s Hospital at Banner Desert Medical Center. The new children’s hospital is named after the long time, Mesa-based Cardon family, which operates the real estate company the Cardon Group, in recognition of its $10 million contribution. The Cardon family gift was officially given by Wilford Allen and Phyllis Reneer Cardon, and Banner states that it marks one of the largest donations to children’s health care in Arizona.

“There is no more important cause than the health and care of children,” says Wilford Cardon in a Banner Health statement. “We have been proud to be associated with Banner’s critical work in Arizona for many years and thought this would be a helpful and timely way to elevate pediatric care in this state. Those who have been blessed have an obligation to help those for whom blessings are still on the way.”

Cardon Children’s is a seven-story, 206-bed medical center and is part of Banner Health’s $356 million expansion of its Mesa campus. The expansion has allowed the children’s hospital to move from inside Banner Desert to its own facility on the Banner Desert campus. As a result, thenumber of beds at Cardon’s Children has expanded from 145 to 248.

The first dedicated children’s medical center in the Banner Health system, Cardon has a pediatric emergency room, as well as units for rehabilitation, radiology, intensive care and neonatal intensive care.

Cardon also has a 10-bed unit designed specifically for the needs of children with cancer and their families. The unit features private rooms, convertible sofas for parents, refrigerators, Internet access, flat-screen TVs and video games. The patients also take part in the Beads of Courage program, which helps them keep track of their progress.

Like Phoenix Children’s, Cardon Children’s physicians are board-certified and are members of the Children’s Oncology Group, a national research group. The oncology group works in association with CureSearch, which provides patients with the most advanced treatment options and research trials available.

Cardon Children’s also has partnered with Mesa Public Schools, so young patients don’t fall behind in their schoolwork. Teachers from the district come in and work with kids at their bedsides. For children who can get out of bed, the new hospital has a classroom where they can attend classes.

Time and money are two things few people can afford to waste, especially these days. In an effort to save both, people often put their own health concerns on the backburner. After all, who wants to take time away from work or family to go to the doctor, wait around to actually see the doctor, and then get a diagnosis and a prescription that has to be filled for a hefty fee (not to mention the cost of the visit)?

But Frances Ducar is changing the way health care is handled in the workplace and making it much more convenient for people to confront their health concerns. As founder and director of Healthcare Solutions Center, she strives to save Arizona employers and their employees money. And she’s saving lives along the way.

Ducar spent more than 20 years in the health care industry in various positions, including first assistant to some of the country’s top surgeons and as a family nurse practitioner.

“I’ve worked with some really amazing specialists, and a little piece of each of them is what makes me who I am today,” she says of her mentors.

In her experiences over the years, she saw how companies were being “eaten alive” by insurance companies. She knew she wanted to find a way to help employers offer their employees quality health care and help employees afford the health care they deserve. With that, Healthcare Solutions Center was born in 2003.

Healthcare Solutions Center offers large companies (with 500 employees or more) an onsite health care clinic staffed by a family nurse practitioner. With HCS onsite clinics, employers save money on their overall health care costs. Employees save money because HCS eliminates co-pays and deductibles and reduces prescription costs to as little as $4. Employees also receive confidential and top-notch care from a nurse practitioner. In addition, HCS has a relationship with a network of some of the state’s finest specialists. If a patient needs further examination beyond what the nurse practitioner can provide, HCS can arrange a timely appointment with a specialist — sometimes even the same day.

“A company is only as healthy as its employees,” says Ducar, adding that people are much more likely to visit an onsite clinic because it eliminates the need to take time off work to travel offsite to a doctor’s office.

Employees don’t just see the nurse practitioner if they are sick. HCS onsite clinics also offer wellness programs to help patients quit smoking and lose weight.

“Knowing you are helping everyone you see in one way or another, seeing a person change their lifestyle, and seeing companies save money and put it back into their wellness plans — these are just a few of the immense rewards of this business,” Ducar says.

She feels good knowing that employers are saving millions on their health care costs and that HCS is helping employees appropriately utilize every avenue and benefit of the company’s wellness plan, including counseling and beyond.

But there are challenges as well. Ducar personally selects her family nurse practitioners, and she admits that placing the right nurse practitioner with the right company is one of the hardest and most important, parts of her business.

“My nurse practitioners are a reflection of me,” she says. “They become the advocate for their patients who just don’t know where to go.”

Ducar must have a knack for placing her nurse practitioners because she says she’s never had a dissatisfied patient.

“The patients trust (the nurse practitioners), and they are all happy to have us there,” she says.

The entrepreneur predicts huge growth for the future of her company, but she says her business will remain in the state for the long haul.

“Love of medicine and the desire to help Arizona companies afford their health care is what drove me to start this company,” Ducar explains.

Justin Marsh, co-founder and CEO of Arthur Andrew Medical, is shining a light on an unconventional approach to improving health. But it all started far from the world of medicine.

Marsh left college with an electronics engineering degree and began his career working as a subcontractor for Motorola, Intel and AMD, developing and installing software.

“Ultimately, it wasn’t my education that allowed me to get into my current industry, it was more by chance and some key contacts that pointed me in this direction,” Marsh says.

Marsh switched careers when he joined the medical field as an investor, eventually buying out all of his partners to become the CEO of Arthur Andrew Medical. The company’s name derives from the middle names of the two founders, Thomas Arthur Aldrich and Justin Andrew Marsh.

The Scottsdale-based company began in 1999 as an international broker and distributor of enzymes and probiotics. To launch the line, Marsh took out a portion of equity from his house and relied on revolving credit. In 2003, Arthur Andrew Medical had a breakthrough when it found enzymes in Japan that it claimed surpassed any available in North America. Enzymes — along with several other benefits — convert our food to energy, eliminate viruses, and purify our blood. When they are formulated with materials found in nature, their beneficial uses can increase. These formulations are known as nutraceuticals or dietary supplements.

Arthur Andrew Medical teamed up with specialized doctors to formulate these enzymes and create nutraceuticals as a natural and alternative way to heal and help patients. The company’s line now consists of seven products that perform several different functions.

The business originally began with the intent of selling only to health care professionals. But Marsh says that as customers wanted more availability of the product, the company decided to open up the line to distribution across the U.S., and one day it plans to expand internationally.

The company has a staff of 10 and a sales force that includes more than 20 contractors and distributors. Besides the office in Scottsdale, Arthur Andrew Medical has a satellite office in San Diego. With four competitors worldwide, including three right here in Arizona, the company must work hard to earn consumers’ trust. One challenge the company struggles with is creative marketing.

“We are not permitted to say that we can diagnose, treat, cure or prevent any disease without first spending millions of dollars on FDA approval,” Marsh says, adding that as a result, the company relies on patient and doctor referrals.

“Unlike pharmaceuticals, our products are effective without any concern of becoming habit-forming or causing damaging side effects,” Marsh says. “We have had success with patients that were considered untreatable with conventional methods.”

Marsh says his main goal is for people to know that, depending on the product, the FDA does not always have the final say.He adds there are options that can help when conventional medicine can’t.

“We approach medicine in an entirely different manner,” Marsh says. “We know our products work and we know there are no risks.”

Today, despite the poor economy, the company continues to grow. Marsh says Arthur Andrew Medical is on track to exceed its growth expectations for this year, with record-breaking sales logged in March.

“It seems the public eye is beginning to see the value of nutraceuticals as the cost of maintaining good health is much less expensive than recovering from poor health,” Marsh says.

What started as an initiative from the city of Surprise Economic Development Department quickly turned into an unprecedented work force study on the entire West Valley spearheaded by WESTMARC. The study came about through a collaboration of communities, corporations, government entities and educational institutions that contributed more than $150,000 to fund the report.

“West Valley communities have experienced tremendous growth since the 2000 Census. They were having difficulty addressing questions from business prospects concerning the size and skill levels of the regional work force,” says Surprise Economic Development Coordinator Megan Griego, who sits on WESTMARC’s economic development committee and was chair of the Workforce Labor Study of the West Valley. “The communities of the West Valley formed a consortium to better understand their region’s work force and to better promote its growth and development.”

Russ Ullinger, senior project manager of economic development for SRP, and WESTMARC co-chair and member of the economic development committee, adds that the concept for the study developed out of necessity.

“Numerous surveys and studies have identified work force as one of the most important assets when national site selection consultants consider different regions and locations for businesses,” he says.

“This is relevant in good economic times, as well as poor economic times. This study truly drills and provides specific labor information unique to the West Valley.”

Harry Paxton, economic development director for the city of Goodyear, who also acted as co-chair of the study, credits WESTMARC’s partnerships with the Maricopa Work Force Connection, as well as Maricopa Community College in the development and funding of the study. He also praises WESTMARC for bringing together work force professionals to get their input on what the study should entail.

“That analysis involved a survey of all businesses in the West Valley with 20 or more employees — all such businesses were contracted and 1,100 completed the survey — and a detailed review of newly available government information,” Griego says.

The detailed data developed by the survey and the analysis of various government data sources is also available through www.usworks.com/westmarc, which presents the comprehensive information and data relevant to businesses, site selectors, economic development professionals, work force development professionals and educators into convenient and customizable reports.

The results of the study can now help the 15 West Valley communities represented in the report to identify their specific needs when it comes to work force issues, transportation and industry growth, and demand. For example, Glendale encompasses more than 6,000 firms, according to the report. Health care accounts for more than 12 percent of total employment in Glendale, which is higher than the Metro Phoenix area as a whole (9.1 percent), but is on par with other West Valley cities. The results also show that 19.6 percent of Glendale workers live and work in the city. The majority of other Glendale employees travel from Metro Phoenix (35.3 percent) and as many as 1.3 percent commute from Tucson.

In general, the study found there are more than 450,000 workers available to fill jobs for the right offer. In addition, there are growth and expansion opportunities in the industries of transportation, wholesale trade, traditional and non-store retail, as well as education. Regarding industry growth, health care leads the trend with a 6 percent growth rate. Construction and transportation/utilities follow closely with a 5 percent growth rate each, and retail in the West Valley has a 4 percent growth rate.

As part of the study, businesses were asked to rate their own work forces on a scale of one to seven, one representing the lowest productivity rating and seven the highest.Sixty-six percent of the area’s employers ranked their employees in one of the two highest categories.

Absenteeism is also a non-issue when it comes to West Valley workers as a whole. The majority of employers, 63 percent, reported that absenteeism is “not a significant problem” at their firms, and when absences do occur, 61 percent of employers reported that the cause is a legitimate illness with childcare.

Jack Lunsford, WESTMARC’s president and CEO, says ERISS Corporation did an excellent job with the study and the results have given them a course of action.

“We found that we have in the West Valley, even in this economy, a very large and qualified labor supply, and we still have some industries that are currently growing and that anticipate growth,” he says, adding that results also show West Valley communities need to implement a live/work/play strategy to avoid the problems with transportation issues.

Landis Elliott, business development director for House of Elliott, says the benefits of the study are numerous. “The study is a tool that the West Valley cities can use while working with potential locates to validate the high-quality employees we have in this region,” she says.

Although I have only been in Arizona 11 years, St. Joseph’s Hospital and Medical Center has been providing high-quality care to Valley residents since 1895. And for the past century, St. Joseph’s has been known for two primary missions: Service to the poor and underserved; and outstanding care, particularly in the neurosciences, driven by groundbreaking innovation.

In the past 25 years, the innovations at St. Joseph’s have been significant, and other hospitals in the state have seen significant growth and expansion of services, as well. We have had unprecedented growth in the Metro Phoenix area, and hospitals have tried valiantly to keep up with the demand for acute care services. In the past 25 years, we have seen many new hospitals built, particularly in the suburban areas, and central hospitals have continued to expand.

Arizona was the very last state in the country to adopt a state Medicaid program in the early 1980s, but the Arizona Healthcare Cost Containment System (AHCCCS) has since been considered a national model of cost effectiveness. We missed out on substantial federal funds for the Medicaid system by being the last state to join, but we have nonetheless run an efficient system with the public dollars Arizona has received.

The health care system has continued to evolve in very interesting ways during the past quarter century. We have seen a clear movement to reduce the length of hospital stays, and many procedures are done in outpatient settings that were once only performed in hospitals.

We have made extraordinary progress in diagnostics and minimally-invasive procedures, which help people recover faster and get treated earlier when disease occurs. In a past era, patients who needed lung surgery had to have their ribcage cracked open and had weeks of extended recovery; now they have it laproscopically and are up walking around the very next day. Cancer used to be a death sentence; now it is often a chronic illness that can be virtually cured. We are better at treating chronic illnesses such as diabetes and heart disease, and we now know how important prevention is to limiting the impact of disease.

But significant challenges still remain. We have evolved into a system of “sick care” not “health care,” and although we know prevention pays dividends, that is not what physicians and hospitals are reimbursed for. The system rewards us when we treat the sickest patients, but not always for keeping them well.

In America, the concept of employer-sponsored health care is considered foundational to our economy. Yet, more than 46 million Americans do not have health insurance, and many of them are vulnerable children. In Arizona, the majority of employees work for small businesses that are under a tremendous strain to provide affordable health insurance. When people transition to public insurance, the reimbursements are declining so much that community physicians are refusing to accept new Medicaid and Medicare patients, while safety-net hospitals struggle to treat all who present themselves at their doors.

The boom-and-bust cycle is hard on the economy, but it is also hard on health care providers. We face a physician shortage in the Valley and a dearth of key sub-specialists for a region this size. In a recession, more people turn to public assistance at the same time the state is trying to cut budgets to compensate for diminished reserves.

Still, I remain hopeful for our state and our industry. Health care continues to be a strong economic engine for Arizona; good paying jobs, great career paths for a wide variety of disciplines and many avenues for innovation. Catholic Healthcare West, of which St. Joseph’s is the flagship hospital, is actively working with the new president and Congress to help shape health care reform so all Americans can have affordable and accessible health coverage. I believe there has never been a time when so much good is possible, and that change can help all of us live better.

It’s no secret that nonprofit hospitals, which account for the majority of hospitals in the U.S., are under growing scrutiny from legislators and regulators. In exchange for being exempt from paying taxes, nonprofit hospitals must provide benefits to their communities, including charity care. As health care reform efforts are beginning to get underway, an increasing emphasis has been placed on tax-exempt hospitals, and legislators are questioning the level of benefits actually provided to the local communities. At the core of this debate is how these hospitals are governed. Consequently, effective health care governance has never been more important.

So, what should health care systems be doing to maximize governance effectiveness? And what can these organizations learn from the governance practices of the most-effective community health systems?

According to a recent study, “Governance in High-Performing Community Health Systems: A report of trustee and CEO views,” which Grant Thornton co-sponsored in collaboration with the University of Iowa, College of Public Health and the American Hospital Association, there are a number of important lessons to consider. The study examines the governance of community health systems based on feedback from 123 hospital CEOs, and follow-up visits and onsite interviews with CEOs and trustees of 10 “high-performing” systems. The “high-performing” systems were selected from a set of performance and governance metrics.

Six principal factors emerged from the study as critical to effective governance at high-performing systems:

Strong values-based CEO leadership and effective management teams
Effective CEO leadership is vital to achieving and maintaining a high level of health system operating performance. Among the specific attributes mentioned by interviewees were a commitment to the system’s mission and values, excellent communication and relationships with the board and medical staff, expertise in financial management and cost controls, a passion for improving the system and its patient care, and strategic vision. They also cited the importance of a strong, effective management team with expertise in the full range of management functions.

Well understood systemwide mission, vision and values
Interviewees emphasized that key internal and external stakeholder groups must understand and support a meaningful systemwide mission statement, a compelling vision for the system’s future and a clearly stated set of core values. These expressions of organizational mission, vision and values can be powerful in unifying the stakeholders and galvanizing energy toward established goals and standards, but only if they are consistently reinforced by organizational leaders throughout the system. Interviewees also recognized that building the understanding and support of key constituencies within the system, and in the communities the system serves, requires continuous attention by the board and management.

A highly committed and engaged board of directors
Trustees commented that a highly committed, well informed and proactive governing board is extremely important to achieving and maintaining organizational success. The board should work collaboratively with the CEO and physician leadership. In addition, many board members stressed the importance of well organized and staffed board committees, the leadership role of the board chairperson and a mutually supportive relationship between the board chair and the CEO. They also noted the need for trust-based relationship between the board of directors and its CEO.

Strong clinical leadership and capabilities
The majority of interviewees underscored the need for committed, competent clinicians as a critical determinant of operational performance. They commented that without strong physician leadership, no hospital or health system can achieve enduring success. A number of interviewees also noted the importance of excellent nursing leadership. Also critical were strong, mutually beneficial partnerships between the system and physicians.

Clearly defined organizational objectives, targets and metrics
Interviewees stressed the importance of working toward well defined organizational targets and evidence-based metrics. These enable the board, management team and clinical leadership to monitor actual performance in relation to established standards in key aspects of system operations. Metrics should include the health systems’ community benefit program, financial performance and quality of patient care.

Healthy organizational culture
Interviewees frequently mentioned the importance of organizational culture. They commented that the prevailing culture within their systems included broad-based commitment to excellence in patient care and operating performance.

In addition to the importance of these six factors, there is ample room for improving board performance, particularly related to boardroom culture, board evaluations and community benefit programs. We recommend the following:

Devote time and energy to serious reflection and dialogue about the board’s fundamental role, responsibilities and the overall caliber of its performance in recent years. Then, develop a concrete strategy for creating a better, more proactive and more effective board.

Reexamine the organization’s current board size and composition. Consider adding greater racial and gender diversity, as well as respected and experienced nursing leaders as voting members. Keep in mind that large boards can be unwieldy; nine to 17 members is considered ideal.

Take a hard look at existing board-development programs. On that basis, adopt a strong commitment and a concrete plan for improving them.

Initiate an overall review of the present board evaluation process. Objectively assess the value it has provided for the organization and determine how to improve its effectiveness. Board evaluation must not be a pro forma exercise with minimal value.

Give careful attention to the boardroom culture and determine steps to make it healthier and more effective. Board members must feel free to express their views and constructively challenge each other and the system’s management team. Directors should actively engage in discourse and decision-making.

Devote attention and resources to meeting emerging benchmarks of good governance for community benefit responsibilities. Establish formal measurable policies and measurable objectives for community benefit plans, with regular reporting on the achievement of those objectives. It’s also important to collaborate with other organizations in ongoing community needs assessment and to provide thorough reports to the communities served regularly at least once per year.

Current and emerging benchmarks of good governance for nonprofit hospitals and health systems should be reviewed, refined and compiled into authoritative, consolidated documents to provide guidance for trustees and CEOs as they strive to meet these benchmarks.

With growing attention from the IRS, Congress and the media, forward-looking health care organizations are taking steps to examine their governance and identify opportunities to strengthen it. Organizations that are committed to continuous improvement not only will enhance their performance, but also improve their systems’ contributions to the communities they serve. The time has never been better to apply these lessons learned.

As we approach a new era in Arizona business, I find myself reminiscing about the small business environment in the Valley 25 years ago, recalling the pioneering spirit of many courageous and determined entrepreneurs. In that era, the Five Cs were predominant revenue sources: cotton, copper, climate, citrus and cattle.

That is no longer the case in today’s marketplace. Technology, biosciences and health care are now dominant industries. Although today’s business climate is faster paced, it still preserves the attitude, perseverance and independence of the earlier years, and 97 percent of Arizona commerce is still fueled by small businesses.

In the Valley of 25 years ago, Motorola and Honeywell were key players in the corporate arena, and the “good old boys” network was alive and well. Though there were fewer participants and less competition, who you knew played an important role in opportunities. And, yes, business was done face to face. Often, a small business venture was cinched with a sincere handshake or a proposal outlined on a paper napkin over a cup of coffee.

And don’t forget the “good old girls.” Arizona has always been progressive with women’s involvement in business and political leadership. Arizona gave women the right to vote before the nation did. We have had four female governors in the past 25 years — no other state comes close.

’ve always called Phoenix “the biggest small town.” Even though it has grown to become the fifth largest metropolitan city in America, it still feels like a big small town to me. And, in many ways, Phoenix’ small business community connects much the same as it did in the small-town era, with networking, referrals, camaraderie and support.

The explosive change that arrived 25 years ago was technology. That’s when the microcomputer industry propelled us into a new era where cell phones, the World Wide Web and computer automation were about to be unleashed on our small businesses. I remember hauling around phone books and city maps in my car or stopping at a convenience store to use the pay phone to verify directions to a meeting — no MapQuest, no Google, no GPS. And today, if you want to know about social media, ask a 13-year-old.

Of course, 25 years ago there was less traffic and fewer freeways. For relaxation, I would head to Tempe, where I’d stroll along Mill Avenue and wander into Changing Hands Bookstore, and then head to Cookies From Home. With my new book and chocolate chip cookie,

I’d settle into a comfortable bench. Today, Mill Avenue is a much different business setting in the heart of Tempe. Also, light rail has rejuvenated many small businesses along its pathway through Phoenix.

In the past, the Valley’s small businesses have experienced many economic storms. Any downturn forces small businesses to reexamine expenses, processes and strategies, while requiring more efficiency, resourcefulness and creativity. Sometimes the hard decision must be made to retool, reinvent or even to start from scratch.

I think it is important for businesses that are doing well at this time to reach out to their suppliers and partners and “pay it forward” by doing business with those who may be struggling. Surviving these challenging times will fortify these businesses and poise them to recapture markets and revenues, and flourish in the upturn.

The sun shines on our business climate, with Arizona consistently in the running for one the top five states for small business. I believe small business will always be an integral part of the identity of Arizona; a place where we nurture creativity, value independence, respect stamina and expect tenacity.

Remember, the threads of small business weave a strong and vibrant tapestry, like the blanket you toss onto the back of a bronco. Sometimes it’s a wild ride and you need to hold on.

Economic development experts in Arizona hope to parlay the state’s convenient geographic location, and even a stagnant housing market, into attracting new businesses.

Toss in relatively low taxes, a freeze on new regulations and a well-honed reputation as a business-friendly state, and recruiters have a tool box full of reasons why businesses should consider relocating to Arizona.

But that’s not all the economic development agencies tout. Local experts know that businesses looking to relocate are interested in those intangible quality-of-life issues: an available and educated work force, a higher-education community that excels in research and churns out highly qualified workers, and a relatively low cost for starting up and doing business.

Television commercials are generally cost-prohibitive, officials say, leading them to rely heavily on the Internet for their recruitment efforts. Feature articles in national trade publications also represent a low-cost way of spreading the Arizona story.

Two of Arizona’s largest economic development agencies — the Greater Phoenix Economic Council (GPEC) and Tucson Regional Economic Opportunities (TREO) — are collaborating on a campaign to lure California businesses to Arizona.

Scarlett Spring, GPEC’s senior vice president of business development, says her team makes targeted trips to California at least once a month, with specific emphasis on the Bay Area, Los Angeles and San Diego. Often, GPEC invites local mayors along to give recruitment efforts an official flavor. Bringing mayors, Spring says, gives recruiters leverage and “opens doors that might not otherwise be open.”

The GPEC message to California?

“Arizona has a business-friendly environment and a reputation of having lowered taxes in some shape or form for 10 consecutive years,” Spring says. “It’s a lower-cost environment for their employees, whether through workers’ comp, competitive wages or health care insurance. Those are the operational costs that a company looks at when considering a financial move or expansion.”

Noting that virtually every phase of running a business is more expensive in California, Spring adds, “What we’re doing is trying to position Arizona as being complementary to the California marketplace.”

DGPEC also invites businesses to Arizona for special events. For example, last November biotech and solar companies from the Bay Area were hosted for a weekend in the Valley. The visit included attending a game between the Arizona Cardinals and the San Francisco 49ers. Two of those companies are close to moving to Arizona, Spring says.

Laura Shaw, senior vice president of marketing for TREO, agrees with the strategy of taking advantage of Arizona’s location. California businesses struggling under mounting operating costs have the ability to move to Arizona and still access California markets.

TREO targets such industries as aerospace, defense, biosciences and alternative energy, and only meets with companies that have been pre-qualified as likely candidates for relocation.

“Research shows that labor drives all market decisions — whether a company can find the labor that fills their needs,” Shaw says. “We focus on matching our assets with a company’s needs.”

Despite the national perception that Tucson is a low-wage community, TREO presses for higher-paying jobs.

What the Tucson area offers is a high-growth Southwestern region situated at the doorstep of California and Mexico, with young talent graduating from the University of Arizona. Tucson is also in the heart of one of the most heavily traveled trucking networks, linking Mexican markets to the California coast.

Meanwhile, the Arizona Department of Commerce, though on a limited basis because of budget cuts, continues to participate in trade shows and foreign direct investment events in Canada, Mexico and Europe. Commerce officials and hired contractors work with foreign companies that are interested in expanding to Arizona. They also help match Arizona firms with foreign customers.

Kent Ennis, interim director of the Commerce Department, confirms that a tight budget makes recruiting more difficult, yet the agency reaches out to major industries, including bioscience and solar. In fact, the Commerce Department led an Arizona delegation to a national convention of bioscience technology companies in Atlanta on May 18.

In addition, the Commerce Department assisted in the relocation of Spain’s Albiasa Solar, which in April announced plans to build a $1 billion renewable solar energy plant near Kingman. The project will create 2,000 construction jobs and more than 100 permanent positions when it is completed in 2013, Ennis says.

The Arizona Association of Economic Development, which is more of a trade organization representing Arizona firms and does not embark on recruiting efforts, nevertheless gets its share of contacts from businesses considering a move to Arizona, says Bruce Coomer, executive director of AAED. But first, he makes sure to sing Arizona’s praises. He mentions the usual advantages, but adds an unlikely twist.

Because our housing market crashed,” he says, “that’s a plus. Now there is affordable housing if a company wants to move here, especially from California. Their employees can really get some bargains.”

An important lesson in the launch of any business or new product is to learn everything you can about your target consumer, and that’s exactly what Mike Atkinson did when he bought the Office Guide to Phoenix 25 years ago. He approached leaders in the community in such industries as health care and law, and asked them what they wanted and needed from a local business magazine.

“I took reams of notes and what came out of it was Arizona Business Magazine,” Atkinson says. “The research led me down a path of this is how it should look and read.”

Atkinson was inspired to enter the publishing arena because it presented the chance to exercise his artistic abilities. He wanted to create “a product that was fundamentally art-related and a product that could help inspire, excite and help educate,” he explains. “I’m an artist at heart, so the magazine’s pages were like my mini-canvases.”

Initially, Atkinson was the sole employee of the publication — he wrote the stories, shot the photos and sold the ads. Today, however, the company has increased to nearly 30 employees and publishes an additional six titles, including AZRE: Arizona Commercial Real Estate, Ranking Arizona, Experience AZ, People to Know, Creative Designer and Scottsdale Home & Design. The flagship publication has also undergone many changes over the years, including its frequency, which has gone from quarterly to bimonthly, and in February 2008, to monthly. The company has evolved as well, and last year was re-named AZ Big Media.

Atkinson didn’t limit his creativity to the magazines, however. In 1991, the company launched its first Arizona Home & Building Expo, which is now in its 18th year. AZ Big Media also hosts a series of awards and events that honor various segments of the business community, from health care to finance. In March 2009, the company held its inaugural Southwest Build-it-Green Expo & Conference. AZ Big Media’s newest venture, the Home & Design Idea Center, opens this summer. The company is also building a strong presence online with its new Web site, www.azbigmedia.com, where readers can find many of the stories featured in each magazine.

“If you go to our Web site, you’ll see ‘online’ is where we’re heading in the future,” Atkinson says. He adds that the future will include more home shows when the market is ready for them. He also hints of possibly even adding a radio station.

If he could go back in time and change one thing, Atkinson says, it would involve the company’s interaction with its audience online.

“At the time, we were just learning about the Internet, and I remember one of my editors came in my office and said ‘Guess where I was today? I was on the computer and I was talking to people all the way in Italy!’ and he began to describe how it took him to different places,” he says. “I thought that was pretty cool, but I didn’t have the foresight to say, ‘This computer Web thing just might turn out to be something really big!’ ”

Looking back on the past 25 years, Atkinson says his success is due to two key things: “Hard work and surrounding myself with the right people.”

Here’s to one day cashing in this 25-year silver achievement for gold.

Arizona has always been known as a great place to start and grow a business. While some industries have been staples of our economy for some time, there’s another growing industry that is bringing jobs, capital, and most of all, innovation, to our state. Arizona has, in recent years, become home to a growing number of biotechnology and medical device companies.

At the heart of every one of these companies is an entrepreneur with a vision and an idea. Some of these entrepreneurs are starting a biotech or medical device company for the first time. That’s scary enough. But the biotech world comes with a whole other set of hurdles that makes it even harder to go to market. One of the first and most important hurdles is getting U.S. Federal Drug Administration clearance. This is a challenging process every biotech, medical device and pharmaceutical company has to face. Here’s an inside look at how startup biotech companies gain clearance for their products and bring them to market.

For starters, which companies need FDA clearance and which ones can bypass the process? Basically, if a company plans to sell its product directly to physicians and hospitals, and wants insurance companies to pay for it, it needs that FDA clearance. All entrepreneurs in this space need to ask themselves that same key question when they start a new venture: Who are you selling this to?

For a small startup biotech business, or even just an engineer with an idea, the FDA process may seem daunting, costly, and in some cases, unnecessary. Many companies try to shortcut the system or choose instead to market under homeopathic regulations, which are quite different than the FDA’s. In these cases, there is often (but not always) less testing or insufficient data to support claims of what the product can do. In some cases, small businesses think the FDA makes the process so difficult and costly they simply can’t do it. It’s important for these startups to remember that gaining FDA clearance should be seen as an investment in their company that allows them to market effectively. It may seem stifling, but it also opens doors to sales channels that wouldn’t be available otherwise and can be very lucrative.

The public often doesn’t realize there are different types of FDA clearances biotech, pharmaceutical or medical device companies can apply for.

Pharmaceutical companies apply for a new drug application, while medical devices fall into three categories:
Class 1 — This is for low-risk devices and it costs almost nothing to submit for this clearance.Class 2 — This is for devices that are substantially equivalent to other devices already on the market. This process can cost about $4,000 just for the submission, not including the cost of testing and developing the submission.Class 3 — This is for new devices or devices that are deemed life supporting/assisting and can cost millions of dollars after testing and the application process is complete. It’s important to remember that only products with a Class 3 are FDA approved, while the others are FDA cleared. FDA approval simply means that the FDA was involved in the testing and it was a new product unlike any other on the market.

Any startup biotech company will want to spend ample time researching the guidelines and class definitions before applying for FDA clearance. It seems like a tedious process, but it is a sound time investment and helps ensure the company only needs to go through the process once per product. Any mistakes along the way can result in going back to the drawing board and starting the process all over again.

To avoid this, these companies need to hire employees and consultants who have been through the process and can lend guidance from experience. Also, it is strongly advised to open a dialogue with people at the FDA. They are there to help companies get through the process smoothly and efficiently, and can help a startup overcome challenges along the way.

So when should you start the process? In most cases, a company will wait until it has a product prototype or a design it’s happy with before starting the application. The process to apply can often begin at the start of the business, but the real work begins once the company has something that can be tested for safety and efficacy. The good news is once the submission is complete, and if everything in the application meets the FDA’s requirements, it will only take 60 to 90 days on average to hear back from the FDA.

Once a company considers FDA clearance they can also expect some changes to their business. As with every form of government licensing, the FDA has rules and guidelines that must be followed, and these are known as the quality systems requirements. This is simply a form of management by the FDA that ensures biotech companies offer a consistent level of quality in every aspect of their business and are marketing products in a way that will not deceive or misguide the public.

In the end, every biotech company has to decide how they are going to grow their business. As we see more and more medical device and other biotechnology companies emerge in Arizona, we’ll see them go to market in vastly different ways.

How would you characterize the health care industry in the Valley?
When I think of health care for the Valley, for the most part we’ve been a growth industry. We have had incredible new facilities that have been built and new partners that have come into town. … But we’ve also been experiencing the downturn in the economy right now, so we are struggling like every other business, and it’s somewhat concerning. Hospitals in particular have been a safety net for our patients, for families, for our community for quite a long time and that is being threatened because of changes in the economy.

Is the health care industry recession-proof?
A lot of people think health care is recession-proof. From our perspective though, we find that we still have people coming in for services … but many people don’t have the ability to pay for their care, and that is why we’ve experienced a downturn; people can’t pay their co-pays, a lot more people are uninsured, so they still need our services and we are here to provide for them … So, I don’t think we are recession-proof. We’ve gone through changes, we’ve had to reduce expenditures, we’ve had to look very critically at some of the services that we provide and assure that they are still mission critical.

What are the major legislative and financial issues facing the Valley’s health care industry?
Well, it’s unclear right now from a legislative standpoint, both how health care reform is going to manifest itself and then on more of a local level, what’s going to happen … the (state) Senate has passed a bill that includes pretty dramatic payment cuts for hospitals, and also reduces accessibility for many people in our community. There are proposals right now to eliminate coverage for a number of children with KidsCare. So those things are really concerning. However, nothing is in its final form and we don’t know. I would just encourage our legislators and our congressmen to really look at what it is that health care provides in the community and be thoughtful about changes that are being proposed.

What are some of the new trends in health care delivery?
It’s an exciting time to be in health care. … one of the great things that has happened is really bringing biosciences and biotechnology to Arizona, and we have really benefited by having those kinds of partnerships with researchers and with some of our scientists in the community. So, when you look at health care out in the future, you really see the opportunity to treat you as a patient on much more of an individual level, so that, through biosciences, we understand you at a molecular level, rather than just say, ‘Well, you have heart disease and the standard treatment for heart disease is X, Y, Z.’ Now we’re saying … ‘We’re looking at you and molecularly this is how you will respond to this kind of drug or this kind of treatment and we know what will work and what won’t work.’

As baby boomers age, what type of competitive edge does that give local health care facilities?
It does concern me — obviously there’s opportunity — but it does concern me from the standpoint that we have people who have far more diabetes, we’re seeing more incidences of certain types of cancers and heart diseases, and many more chronic diseases. So when you look at baby boomers aging and the incidences of chronic disease, there’s opportunity in treating those people, there’s also concern about it potentially overwhelming the health care system. We’re going to need many more nurses, physicians, facilities, and we’re going to need to be smarter about how we take care of people.

How has health care evolved locally?
The most exciting thing that I’ve seen in health care in Arizona is that providers recognize … that we do a much better job of taking care of patients when we work more closely together. So a lot of our initiatives are really bringing a health care team together to look at you as a patient and say what’s going to make sense through an entire continuum of care, and make sure you get the right treatment at the right time. Also, that we work much more cooperatively with you to do preventative work.

To what do you attribute your success at the C-level?
I think I have a great passion for John C. Lincoln and a great passion for our mission. I feel so honored to come to work every day and to work for people who are really making a difference in people’s lives. … I think I’m also analytical, I like to think strategically, I try to think beyond what are the issues of today, but look to where do I want John C. Lincoln, where do I think we should be five years from now, 10 years from now. I also very much value getting the right person in the right job, and we just have some excellent, excellent people here at John C. Lincoln. While I can look to things where I really feel I’ve made a difference here at John C. Lincoln, I know I’ve done that in the context of a really fabulous team of people.

Vital Stats

Appointed president and CEO of John C. Lincoln Health Network in April 2009

Joined the network in 1987

Held executive posts at both network hospitals

The network includes John C. Lincoln Deer Valley Hospital and John C. Lincoln North Mountain Hospital

Under her leadership, North Mountain Hospital was recognized for excellent patient care by U.S. News and World Report

Earned a Maser of Science in business administration from Arizona State University

Is involved with the Better Business Bureau, the Phoenix Boys Choir and the American Cancer Society

Richard L. Boals
President and CEO
Blue Cross Blue Shield of Arizona

What are some of the major trends in the health insurance industry?
In health, I think there is a shift toward an increased responsibility toward the individual. We’re asking people to take accountability for themselves. We’re giving them information that they can use to monitor their health status, but we also would hope that they would lose weight, they would quit smoking, they would wear their seatbelt and do the things that are sort of common sense, but can make their life much more enjoyable and in the net, save a lot of money.

In the business world in terms of health insurance, how is that industry looking right now in Arizona?
It’s actually, I think, very healthy. We, like every other industry, are starting to feel the pain of companies who are laying-off employees. So, we’re seeing a little bit of shrinkage within the general size of our group, but we’re growing at about 7 to 8 percent a year, so we feel very good about where we’ll be when we come out the other side of this economic downslide.

How has the recession affected the health care industry in general and health insurers in particular?
There are a couple of things that are happening. In the hospitals, they are starting to see fewer elective surgeries and to some extent that is the bread and butter of a hospital, and if people are holding off getting things done, that pulls down on their revenues. They are also seeing more cost-shifting from the government — or we’re seeing the cost-shifting from the government — and as Medicare and Medicaid pay less and less, I think it’s difficult for hospitals to make a bottom line.

What role is Blue Cross Blue Shield of Arizona taking in the debate over health care reform?
We’re trying to take a very active role both locally and in Washington. We believe that everybody ought to be covered. We’re a little perplexed that of the 40 million or so uninsured that about a quarter of them already qualify for some state or federal program and simply have not been enrolled. So as we talk about expanding the government’s role, I think we need to expand their accountability for getting people enrolled. But we believe that everybody should have access to good coverage. We believe that the government should not form a competing model, to not promote us but to try to bring us down. Beyond that, I think we’ll see what comes of it. I really believe that the government has an extraordinary opportunity here to inject energy into the health care system. My fear is that as they try to ratchet costs down and save money, they’re going to discourage innovations, and a few years from now we are going to be very disappointed that the supply of physicians and nurses and new technologies is going to be less than it is today.

BCBS of Arizona is working with the Arizona Healthcare and Hospital Association and the Arizona Chamber Foundation on what has been called “the hidden health care tax” in the state. How and why did Blue Cross Blue Shield become involved in this issue?
We’ve been interested in this issue for a long, long time. We were happy to see that others were beginning to recognize that this is a serious problem. About 15 percent of our premium is a result of a government program not paying their fair share. As the hospitals and doctors figure out that they can only push so much to the insurance companies or to the private individuals, they have to speak up and say it’s time for the government to start paying a more realistic amount for the care they are providing to their accountabilities, the elderly and the indigent.

What advice do you have for a C-level job candidate on how they can show either that board of directors or that panel they’re interviewing with that they are somebody who can successfully lead a change in a business?
I think it gets down to two things. One, it’s about the customer — you always have to have them in mind. And it’s about the people you hire to support you. Being in a C suite assumes that you are not doing the physical work, that you’ve hired a team of talented and dedicated people who are going to make you look good, and over the years I have been very fortunate; people have made me look good.

Vital Stats

Joined BCBSAZ in 1971

Appointed CEO in April 2003

Board member for BCBSAZ, the Blue Cross and Blue Shield Association and TriWest Healthcare Alliance

Board member for Greater Phoenix Leadership, the Translational Genomics Research Institute and the ASU W.P. Carey School of Business Center for Services Leadership

Won the ASU Alumni Leadership Award and the American Jewish Committee’s National Human Relations and Centennial Leadership Awards

Bachelor’s degree in accounting from Arizona State University; completed executive development courses at Duke University, the University of California, Harvard University and the University of Michigan

The Arizona Hospital and Healthcare Association (AzHHA) and the Arizona Chamber Foundation are joining forces to stop what we call a hidden health care tax on businesses and consumers. According to a study released by the Arizona Chamber Foundation, which is associated with the Arizona Chamber of Commerce and Industry, Arizona employers and the state’s 3.5 million privately insured consumers pay 40 percent above cost for hospital services, primarily because the state and federal governments significantly underpay hospitals for those same services.

“This study shines a light on what Arizona business and health care leaders refer to as the hidden health care tax,” says Suzanne Taylor, executive director of the Arizona Chamber Foundation. “The study demonstrates that when state or federal lawmakers reduce hospital payment levels to below their costs, Arizona businesses and consumers pick up the tab in the form of higher health insurance premiums.”

The study, An Analysis of Hospital Cost Shift in Arizona, was conducted by the nationally recognized Lewin Group. It found that in 2007, private insurance payments for Arizona hospital services exceeded costs by $1.3 billion in order to offset underpayment from:

State government — The Arizona Health Care Cost Containment System (AHCCCS), Arizona’s Medicaid program that paid 79 percent of hospitals’ costs for providing services, underpaid Arizona hospitals by $407 million.

Uncompensated care — Arizona’s hospitals absorbed $390 million in 2007 — 4.4 percent of their total costs — for services they delivered, but for which they received no compensation.

Public insurance programs such as AHCCCS and Medicare are the primary drivers behind the hidden health care tax, paying hospitals below what it costs to treat patients. To cover these costs, hospitals shift the burden to private health insurers by negotiating higher rates to provide coverage.

“In this downturn, the hidden health care tax is particularly harmful to the economic well-being of our state,” Taylor says. “Employers throughout Arizona are grappling with incredible challenges ranging from declining revenues to shrinking credit. The hidden health care tax is another weight on businesses that want to continue providing employer-based insurance to their employees.”

Arizona employers and their employees typically share the cost of health insurance coverage, with employers paying an average of 81 percent of a single policy and 75 percent of a family policy for workers enrolled in their respective health plans. According to the study, in 2007 inadequate payment by AHCCCS and Medicare, as well as uncompensated care, increased private health insurance premiums in Arizona by 8.8 percent or $361 for every privately insured person.

The study revealed that public program underpayment in 2007:

Added $1,017 — $324 of which is due to AHCCCS underpayment — to the annual price tag of a typical family health insurance policy, bringing the cost to $11,617.

Increased by $396 — $126 of which is due to AHCCCS underpayment — the annual cost of a single health insurance policy, bringing the price tag to $4,519.

Underpayment by public insurance programs for hospital services exacts a steep price on employers, their workers and private purchasers of health insurance. In 2007, the cost shift due to AHCCCS, Medicare and uncompensated care cost: employers an additional $941.7 million, $301.3 million resulting from AHCCCS underpayment; employees an additional $292.8 million, $93.7 million of it due to AHCCCS underpayment; and private purchasers of health insurance an additional $41.4 million, $13.2 million of it resulting from AHCCCS underpayment
AHCCCS payment rate freeze.

Five percent AHCCCS payment rate reduction.

Disproportionate share hospital payments.

Graduate medical education.

AHCCCS payments to rural hospitals.

State savings of $95 million.

Lost federal funds of $250.4 million.

Total dollar increase in private insurance premiums due to the cost shift of $1.48 billion in 2009 and $1.63 billion in 2010.
Individual increase in premiums of 19 percent for privately insured Arizonans due to the cost shift.

The current economic downturn and the prospect of dramatic changes to the nation’s health care system under a new administration are making 2009 one of the most challenging years ever for Arizona’s medical industry.

If that weren’t enough, however, our state’s hospitals, clinics, and diagnostic and out-patient centers — and the physicians who serve them — are getting a crash course on how to administer sweeping new compliance procedures and regulations recently issued by the Centers for Medicare and Medicaid Services (CMS).

Last year, CMS posted the 2009 Final Hospital Inpatient Prospective Payment System (IPPS) rule, which is having an impact on hospital operations and policies, as well as physician arrangements. Included were several changes to the so-called Stark Law (named for U.S. Rep. Pete Stark, D-Calif.) covering Medicare and Medicaid.

The impetus for the new provisions was a worthy one — curbing physician self-referrals and stopping kickbacks. Nevertheless, Arizona doctors and health care entities are scrambling to alter their ways of doing business. The downside for not doing so: denied payments, or penalties, from Medicare and/or Medicaid.

Some of the provisions went into effect last October and others begin this October. They will result in the significant restructuring of many physician arrangements, particularly joint ventures between doctors and facilities. Some of the rules are providing more flexibility in these arrangements, while others have become more restrictive.

Stand in its Shoes
One area of flexibility is CMS’ decision, effective last October, to decline adopting tougher “stand-in-your-shoes” procedures. This would have mandated that when physicians’ organizations contracted with an entity such as a hospital, each physician in those groups would have been deemed to be part of that contract as well.

Under the finalized rules, only physicians who have an “ownership or investment interest” in such an organization will be considered to “stand in its shoes” for purposes of compliance with the Stark regulations.

Percentage-Based Compensation
Soon to be a thing of the past is percentage-based compensation arrangements for space and equipment rental lease arrangements. CMS initially proposed a broad prohibition for using percentage-based compensation formulas to calculate revenue from services performed or business generated in leased office space or from leased equipment.

This October, the final rules will take a more targeted approach, specifically addressing CMS’ concerns with percentage-based compensation regarding lease arrangements.

Per Click: Lease Arrangement Payments
Also this October, the new procedures will significantly limit the use of unit-of-service, or “per-click,” payments in the context of physicians’ space and equipment lease arrangements. This pertains to physicians leasing time on diagnostic equipment to perform tests on Medicare and Medicaid patients.

Specifically, CMS revised exceptions for such leases, determining fair market value, and for indirect compensation arrangements to prohibit “per-click” payments to a physician lessor where the payments reflect services on patients who had been referred to the lessee by the physician.

Furthermore, the prohibition applies regardless of whether the physician is the lessor or whether the lessor is an entity in which the referring physician has an ownership or investment interest.

CMS states that the new rule does not prohibit physicians from leasing equipment or space to entities on a per-use basis for services rendered to patients who were referred from others. In most cases, CMS will not prohibit time-based deals in which a physician rents time on a CT or MRI scanner.

Services Provided Under Arrangements
Entities, including physicians, that provide services to hospitals “under arrangements” (for example, when a hospital bills for services but arranges for another entity to provide the services), will now be considered DHS (designated health services) entities themselves for Stark Law purposes.

Previously, only the person or entity that billed for DHS was deemed to be “furnishing” the DHS. CMS’ new definition of entity, effective in October, is that a person or entity is considered to be “furnishing” DHS if it has (1) performed the DHS even if another entity bills for the services; or (2) presented a claim for Medicare benefits of the DHS.

As a result, physicians will be limited in their ability to refer patients to “under arrangement” service providers in which they have an ownership or investment interest. Restructuring of existing joint ventures between physicians and hospitals will be needed.

This is only the start. There are several other provisions — including malpractice insurance, physician retirement plans, disallowed referrals, compliance requirements and other hospital-physician agreements. Hopefully, this gives you an idea of the issues and challenges facing Arizona’s health care industry during the rest of 2009.